Stonegate Pub Co, Tasty, Portobello, demographics, costs & other:

A DAY IN THE LIFE:

I don’t know when or if I’m ever going to get our grass cut.

Because most of the garden is currently something of a quagmire or a swamp, whichever is worse and, as I sink up to my ankles in muddy water in bits of it, I think I’d be hiring a tractor – or the local rugby team – to pull the mower out if I was foolish enough to try a cut.

So there’s a mixed feeling of guilt and horror as I’ll be deciding again this weekend that a trip to the pub, where I can judge the length of their grass against mine, is going to have to take precedence over gardening.

Anyway, bit busy on Stonegate and Tasty today so we might have to move straight on to the news:

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TASTY:

Tasty, which currently has 49 operating sites, two non-trading and three sub-let sites (but which only has a market capitalisation of £1.4m) yesterday mid-morning updated on trading and gave details of a proposed restructuring. Our comments are set out below:

Proposed restructuring and loan: Poor trading has led the company to explore the ‘strategic and restructuring options available to it….’

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The Loan: Trading: Langton comment:

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STONEGATE PUB COMPANY:

Stonegate Pub Company Limited has reported its FY numbers for the year ended 24 September 2023 to Companies House. During the period, turnover marginally increased but profitability decreased with the company’s overall loss before tax widening year-on-year (YoY). The ultimate controlling party is TDR Capital Stonegate L.P., an investment fund managed by TDR Capital LLP, a private equity management firm. Manjit Dale, founding Partner of TDR Capital, resigned from the board of Stonegate on 1 December 2023.

Stonegate Pub Company Ltd is governed by Cayman Island Company Law, there is no statutory requirement for accounts to be audited in the UK. The directors signed off on the accounts on 18 January 2024. Revenue grew by 6.7% YoY to £1.7bn in the 52 weeks to 24 September 2023, sales were ‘favourable’ compared to the prior year which included the negative impact of the Omicron Covid-19 variant.

Stonegate’s managed segment saw revenue +3.6% to £1.0bn, with like-for-like (LfL) sales +3.0% (2022: +0.9%). Leased & tenanted pub revenue increased by 2.6% to £427m, with LfL sales +5.5% (2022: -3.2%). The operator-led segment posted revenue +28.3% to £281m, with LfL sales +10.3% (2022: +9.5%). EBITDA fell to £442m in the period, from £465m in 2022. Adjusted EBITDA fell to £375m from £400m. Operating profit fell to £68m from £118m. Stonegate reported a loss before tax of £257m, up from 2022’s loss of £130m. This was driven by finance costs increasing by £18m YoY to £301m….

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PUBS & RESTAURANTS:

(Some) cost hikes for consumers annualising:

Barclays data suggests housing costs are stabilising, with mortgage repayments and rents rising by 1.8% in March YoY, as households begin to annualise the shock. This trend follows years of surging payments driven by soaring inflation, higher interest rates, and reduced supply due to factors like increased taxes and regulation in the buy-to-let sector….

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Demographics:

The FCA has reported that some 7.4 million UK adults are still struggling to pay bills due to the high cost of living. The figure is down on the 11 million or so reportedly impacted last year, but the FCA says many households still feel ‘heavily burdened…’

Other news:

SIBA has collaborated with the Great British Pub Awards to introduce a new category for Best Beer Pub, now open for nominations. The award recognises pubs with outstanding beer offerings, emphasising consistent value, high standards in service and staff training.

Labour has said that it will ‘fix’ the broken business rates regime in the UK if it gets into power. UKH has welcomed the comments.

Tesco has reported FY numbers this morning saying that sales rose by 7.4% to £61,5bn with PBT up 159% at £2.3bn. CEO Ken Murphy says ‘inflationary pressures have lessened substantially, however we are conscious that things are still difficult for many customers, so we have worked hard to reduce prices and have now been the cheapest full-line grocer for well over a year’….

COMPANY NEWS:

Portobello Pub Company has purchased loss-making bar company Darwin & Wallace, reports Propel. It says the purchase, for an undisclosed sum, will see the Mark Crowther-chaired Portobello continue to operate under the same name. It says it will grow the ‘successful and high-quality business group’ over time.

Wendy’s announces new restaurant openings across England, with locations planned in Wood Green, Southend-on-Sea, Colchester, Middlesbrough, Newcastle, Liverpool, and Sheffield. Michael Clarke, UK managing director said ‘the love and excitement for this iconic brand grows stronger with each new restaurant opening.’

The Spanish Caravan in Liverpool, known for its Mediterranean atmosphere and football screenings, unveiled a mural of Jürgen Klopp on its exterior wall to celebrate his success as manager of Liverpool FC.

Wonderland Restaurants has announced that The Monarch Theatre will reopen at a new London location later this year. It also announced that it has closed its Batman-themed London restaurant Park Row in Soho.

HOLIDAYS, HOTELS & LEISURE TRAVEL:

Spain plans to end its ‘golden visa’ scheme, which grants residency to foreigners investing in real estate, aiming to prioritise affordable housing access over speculative business. Prime Minister Pedro Sanchez highlighted the dominance of real estate investment in the scheme and its impact on housing availability for residents in major cities.

FINANCE & MARKETS:

Us CPI numbers at lunchtime.

German exports fell by 2% MoM in February, a sharper fall than the 0.5% that had been forecasted by a Reuters poll. The decline was driven by reduced exports to EU countries, indicating sluggishness in the economy. Meanwhile, imports to Germany rose by 3.2%, and deliveries to third countries saw a modest increase of 0.4%.

JP Morgan Chase CEO Jamie Dimon has said that the chance of a hard landing for the US economy are significantly greater than markets are pricing in. Whilst hopefully they are his outlying predictions, Mr Dimon says he could see some scenarios under which interest rates in the US went to 8%.

Sterling up at $1.2676 and €1.1684. Oil down at $89.46. UK 10 year gilt yield down 7bps at 4.03%. world markets mixed yesterday but London set to open as much as 53 points higher as at 6.30am.

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